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In The News

July 25, 2017

American Banker

Can AI spy financial crime without implicating innocents?

“QuantaVerse is one vendor of AI software for financial crime detection. QuantaVerse takes the identity verification data banks already get from providers like Thomson Reuters, LexisNexis and FactSet and analyzes it in aggregate.”

Wayne-based AI company QuantaVerse lands WIRED profile

“Artificial Intelligence company QuantaVerse, founded by Navy vet David McLaughlin, was the star of a Wired article last week on how banks are using AI to fight money laundering, terrorism and other criminal activity. Using proprietary data science algorithms to sift through internal and external data, QuantaVerse sells its services to the banking industry.”

New Solutions: AI Takes on AML

“QuantaVerse, innovator of data science and artificial intelligence solutions created to identify financial crimes, released a complimentary analysis that financial institutions can use to test the effectiveness of their AML programs. The CCO Checkup will analyze transaction data to detect “false negatives” or anomalous behaviors that may have been missed by an institution’s existing TMS.”

Banks to use AI to sever terrorists’ funding

“In an effort to combat terrorist activities, banks are planning to start using artificial intelligence (AI) and machine learning to identify suspicious transactions and sever funds to jihadists. QuantaVerse, a Pennsylvania-based technology firm, has developed an AI to monitor and identify financial crimes, from terrorist funding to money laundering.”

“Such capabilities were pivotal to identifying an alleged drug trafficking ring in Panama — Grupo Wisa, a holding company which runs duty free stores in Latin American airports. QuantaVerse found a series of invoices for large, round dollar amounts being passed back and forth between businesses that had the same owner, a telltale sign of a money laundering operation. Moreover, the firm’s founders believed it may well have been in aid of terrorist activities.”

AI is the Key to Ending Terrorism and Other Criminal Activities

“QuantaVerse’s AI system can also detect potential money-laundering transactions by looking at account history and its existing relationship with other bank accounts. Traditional systems can only check up to three months’ worth of data while QuantaVerse’s system can handle up to three years of bank history.”

Banks Deploy AI to Cut Off Terrorists’ Funding

“Banks are increasingly turning to machine learning to mine vast quantities of bank data and find anomalies in accounts and transactions that might otherwise have gone unnoticed. “It’s a surgical approach to finding a needle in a haystack,” says Stitt, who now serves as director of financial crime analysis for the Wayne, Pennsylvania-based firm QuantaVerse, which developed the AI technology that some of the world’s biggest banks use to identify money laundering, terrorist funding, and other financial crimes. The technology has already helped identify a Panamanian man the DEA called one of the world’s most significant drug money launderers.”

Improving the Effectiveness of AML Programs

“To combat money laundering, transaction monitoring systems (TMS) are relied upon as a first line of defense by financial institutions. However, TMS can allow an unacceptable number of illicit transactions, or false negatives, to go unflagged due to their dependency on the identification, development and manual implementation of new TMS rules and scenarios.”

“Regulatory and cost pressures are exposing the limitations of traditional approach to compliance, and forcing banks and other financial institutions to innovate by adopting new technology and operational models.”

CCO Checkup helps financial firms test AML program effectiveness

“Financial institutions can take full advantage of QuantaVerse’s CCO Checkup with minimal effort and no long-term commitment. Included in the CCO Checkup, participating financial institutions receive a QuantaVerse Financial Crimes Report (FCR) detailing the five cases scored highest by the AI solution and representing the greatest risk to the institution.”

QuantaVerse offers CCO Checkup for AML Compliance

“QuantaVerse has released a new tool, the CCO Checkup, aimed at financial institutions who want to reduce their AML-compliance risks. Unlike existing transaction monitoring systems (TMS), AI technology based systems are dynamic and can detect patterns of behavior and analyze the intent of those patterns to identify suspicious activities.”

AI Tackles Money Laundering: QuantaVerse Introduces Free Checkup Tool

“The QuantaVerse solution also provides financial institutions with a virtuous feedback loop that improves performance of their TMS by recommending new rules for catching new criminal behavior patterns that are uncovered during AI analysis. This provides financial intuitions with documented guidance on TMS rule scenarios and model tuning and drives continuous improvement of their AML efforts over time.”

“The CCO (Chief Compliance Officer) Checkup is a free service whereby QuantaVerse’s AI solution will analyze transaction data to detect “false negatives” or anomalous behaviors that may have been missed by an institution’s existing transaction monitoring system (TMS).”

Rise of the Machines: Boards Brace for AML Changes

“Anti–money laundering (AML) service providers such as Giant Oak, Nice Actimize, Oracle Financial Services and QuantaVerse are developing and deploying technology that uses machine learning (ML) and artificial intelligence (AI) to help companies more effectively comply with regulations aimed at curbing money laundering and other crimes.”

U.S. Banks Should Seek New Solutions – Not Reduced Expectations – In Fight Against Financial Crimes

“I have witnessed how the evolution of data science including big data, machine learning and artificial intelligence (AI) is beginning to transform the battle against financial crimes. One hallmark of an ineffective AML program is the occurrence of false positives, transaction alerts that are not ultimately money laundering. Even more troubling are the undetected transactions, or false negatives, that allow money launderers to continue to operate with impunity.”

“Although the dire need to put a stop to money laundering is well understood, an ongoing negotiation regarding what amount of money laundering is an acceptable cost of doing business plagues regulators and those inside who are responsible for the detection and prevention of financial crimes.”

How AI is Helping Banks Fight Trafficking

“In the past few years, artificial intelligence has emerged as a solution to help banks zero in on transactions that herald criminal activity. Machine learning allows for the identification of suspicious patterns, and AI systems are able to comb through large amounts of data more precisely and efficiently, catching instances of money laundering faster and with more accuracy than ever before.”

Using Data Science to Mitigate Bank Employee Fraud

“Data can and should be harnessed by banks to produce valuable insights regarding the behaviors and actions of people and entities—both legitimate and illegitimate. If the right questions are being asked, there is no excuse for this type of fraud or unethical behavior to exist on a systemic basis. Data science, including big data, artificial intelligence and machine learning, can enable institutions of all industries and sizes to better manage risks, to find fraud and criminality, and to therefore support the needs of compliance, management and governing boards.”

“QuantaVerse today announced that its artificial intelligence (AI) and data science-powered technology platform is uniquely designed to help banks and other regulated institutions comply with risk-based Anti-Terrorism and Anti-Money Laundering (AML) regulations, including the rule recently put into effect by the New York Department of Financial Services (DFS).”

“Wayne-based fintech startup QuantaVerse has a well-defined idea, deep domain expertise, a clear market opportunity, proprietary technology, an increasing amount of funding, and some strong supporters. Founded by former SEI Investments (NASDAQ: SEIC) executive David McLaughlin in 2014, QuantaVerse uses a combination of data science techniques to filter through a bank’s data as well as external data to flag potential money laundering cases and other potential crimes.”

‘A Robot Could Alleviate This Drudgery’: Bank Compliance Meets AI

“David McLaughlin, CEO of QuantaVerse, whose AI software is used by large banks and card issuers to improve their AML processes, estimates about 75% of the work human investigators do on money laundering cases could be automated. Artificial intelligence’s ability to analyze vast amounts of data, looking for patterns and to scrape the dark web and the deep web, can be applied to know-your-customer processes, McLaughlin said.”

How Wells Fargo Could Have Avoided a Scandal

“The firing of 5,300 Wells Fargo (ticker: WFC) employees for purportedly opening two million unauthorized accounts suggests that management wasn’t comfortable with this unethical activity. Many are speculating that such activities happening over a period of several years, means that, overtly or covertly, some managers turned a blind eye to a situation of ongoing, and systemic, fraudulent activity.”

Wayne Company Battles Money Launderers

“Wayne-based QuantaVerse is walking the line between early stage and growth stage as it delves into a major marketing push and eyes a series B round in the coming months. The company is aiming to make waves in the anti-money laundering technology market, one that experts say is rife with chances to produce powerful results on an international scale.”

Artificial Intelligence: The Next Frontier in AML Compliance

“We are seeing growing interest from the largest to the smallest banks alike,” says David McLaughlin, chief executive of QuantaVerse based in Wayne, Penn. “Small to mid-tier banks also rely on relatively large investigative teams and can achieve a different decision on whether the alert represents suspicious activity depending on the analyst. There is little consistency because subjective opinions can play a factor.”

Press Releases

“QuantaVerse, innovator of data science and artificial intelligence (AI) solutions purpose-built for identifying financial crimes, today announced a complimentary analysis that financial institutions can use to test the effectiveness of their AML programs. The CCO (Chief Compliance Officer) Checkup is a free service whereby QuantaVerse’s AI solution will analyze transaction data to detect “false negatives” or anomalous behaviors that may have been missed by an institution’s existing transaction monitoring system (TMS).”

“QuantaVerse, innovator of data science and AI solutions purpose-built for the identification of financial crimes, has released a new paper that explores how the application of artificial intelligence (AI), machine learning and big data strategies enables banks and financial institutions to surpass the risk-based customer due diligence (CDD) or “Fifth Pillar” requirements by the May 11, 2018 applicability date.”

“QuantaVerse today announced that its artificial intelligence (AI) and data science-powered technology platform is uniquely designed to help banks and other regulated institutions comply with risk-based Anti-Terrorism and Anti-Money Laundering (AML) regulations, including the rule recently put into effect by the New York Department of Financial Services (DFS). QuantaVerse is uniquely able to provide institutions and their senior compliance leadership with data-driven solutions to enhance their existing transaction monitoring systems.”

“Last week, QuantaVerse, a data science company founded specifically to help the financial services industry, was chosen as the winner of the “People’s Choice Award” based on polling of conference attendees at the IMPACT 2016 Capital Conference. From a pool of close to 200 applicants, QuantaVerse was among 45 regional technology companies invited to present at the conference which included institutional investors, venture investors, angels as well as technology professionals. QuantaVerse was one of three companies presenting at the conference to be selected to enter the IMPACT “Lion’s Den” and pitch a panel of notable investors.”

QuantaVerse Secures New Investments to Accelerate Company Growth and Scale Data Science Platform for the Banking Industry

“QuantaVerse, a data science company founded specifically to help financial services companies, today announced it has secured new financing from private equity investors. This latest round of funding has raised the current investment in QuantaVerse to $1.5 million, and will enable QuantaVerse to accelerate its growth and scale its advanced data science platform to meet growing demand by banks and financial services firms.”

“Financial services industry veteran David McLaughlin today announced the formation of QuantaVerse, a new data science technology company focused on providing risk reduction and revenue‐growing solutions purpose‐built for banks and financial services firms. QuantaVerse is a data science engine that looks beyond banks’ own customer data to capture meaningful insights that improve financial results for clients.”

White Papers

How Data Science Can Reduce AML ‘Fifth Pillar’ Risk

“New technologies including Artificial Intelligence (AI), Machine Learning, and Big Data enable banks and financial institutions to surpass KYC regulatory requirements. Financial institutions have long recognized the importance of Know Your Customer (KYC) regulations and requirements, yet over time, many institutions came to view KYC as a check-the-box compliance function rather than as a robust risk management tool. This mindset was driven by manpower and systems expenses.”

Case Studies

“One of the world’s largest banks, serving millions of customers around the globe, wanted to increase its effectiveness in identifying suspicious activity that could be indicative of money laundering. While the bank was in compliance with relevant anti- money laundering (AML), Bank Secrecy Act (BSA) and Know Your Customer (KYC) regulations and mandates, it was interested in enhancing its compliance capabilities to further reduce risk. Upon learning of a new, data science powered solution purpose built to identify money laundering in the banking industry, it chose to evaluate its effectiveness.”